Damages for non conforming goods under vienna convention a comparison with vietnamese law

Joint Svvedish-Vietnamese Master’s Programme MASTER’S THESIS TRAN THUY LINH Damages for Non-conforming Goods under Vienna Convention A Comparison with Vietnamese Law SU PE R V ISO R S: Eva Lindell - Frantz Nong Quoc Binh THU VI ỆN ĨRUÒNG ĐẠI HỌC LŨẬT hà nội PHÒNG ĐOC Ũ /Ị Acknowledgements My grateíul thanks, first of all, to my supervisors, Ass Professor Eva Lindell - Frantz, Faculty of Law, Lund University, Sweden and Dr Nong Quoc Binh, Faculty of International Law, Hanoi University of Law who gave me great advice and support while I was working on my thesis I also express my thanks to the librarians vvorking at the Faculty of law, Lund University and Hanoi University o f Law Without their kind help and useful suggestions, I could not have íinished this thesis Lastly my thanks are due to my family, and ữiends who patiently supported me all the tirae Table of Contents A cknow ledgem ents Table of C ontents A b b r e v ia t io n s Executive Sum m ary Introduction 1.1 Subject- Back g ro u n d 1.2 Research question and aim o f th esis .8 1.3 M ethodology 1.4 D elim itation 1.5 Sources o f the thesis 1.5.1 The Vienna Convention on the International Sale o f Goods (C IS G ) 1.5.2 Vietnam ese Law on International Sale o f G oods 11 Some G eneral Issues on Damages for N on-conform ing goods .11 2.1 Contract and breach o f contract 11 2.1.1 Contract and contract for intem ational sale o f g o o d s 11 2.1.2 Breach o f co n tract 14 2.2 N on- coịrm ing goods 17 2.2.1 The seller’s obligation to ensure c o n fo rm ity 17 2.2.2 B uyer’s remedies for non -conform ing goods 19 2.3 D am ages for breach of contract 21 2.3.1 Damages in general and damages for breach o f contract 21 2.3.2 Contractual Interest protected and categories o f loss 24 Dam ages for non -coníorm in g goods under com parative perspective between CISG and Vietnam ese lavv 26 3.1 The Right to require dam ages 26 3.1.1 Right to damages in general 26 3.1.2 The conditions o f liability 28 3.1.3 The relation to other rem edies 29 3.2 Calculation o f dam ages 30 3.2.1 D am ages as full com pensation 30 3.2.2 Loss recoverable 32 3.3 Limits to claim s for dam ages 36 3.3.1 The íoreseeablity 36 3.3.2 Time banner, notice .37 3.3.3 Burden of proof 40 3.4 Damages in case avoidance of contract 42 3.5 The obligation to mitigate the los^ .44 3.6 Exemptions for damages : 46 Some evaluative conclusions drawn from this comparative stuđy and some suggestions on improving Vietnamese L a w 49 4.1 Some evaluative conclusions drawn from this comparative studying 49 4.2 Solutions to improve Vietnamese Law on damages for non-conforming goods in International sale of goods co n tract 51 4.2.1 Vietnam should ratify the Vienna Convention assoon aspossible 51 4.2.2 Amending somes regulations o f Vietnamese Lavv on this issue 52 Conclusion 55 Table of Statutes and other LegalInstrum ents 56 International Treaties and C onventions .56 National Legislations 56 Case Law 57 B ibliography 58 Abbreviations CISG United N ations Convention on the International Sale of Goods ucc us U niíbrm Commercial Code (of United States) UN U nited Nations UNCITRAL United N ations Commission on International Trade Law United States Executive Summary The thesis gives a systematic analysis o f damages as a buyer’s remedy for nonconíorming goods under an intemational sale contract under the 1980 UN Convention on International Sale o f Goods (CISG) and Vietnam ese Law The aim of the thesis is seeking to provide a comprehensive remark o f the similarities and differences o f the resolve of damages for non - conforming goods between Vietnamese law govem ing contract for sale o f goods and CISG and base on the result o f comparative studying to try to give some solutions for improving Vietnamese law in this íĩeld Delivery o f defective goods is very typical in the reality o f intemational sale of goods contract where m ost problem arise How to defme defective goods and how to apply the available remedies in this case? The reality o f intemational sale o f goods shows that damages is the areạ most important to parties in a dispute, specially, in case the difference in location of parties in intemational sale contract lead to the difficult in applying some other remedies such as repair or replacement Moreover, damages is also one o f the most complex and controversial remedy There are a large number of damages issues for non-conforming goods but the study only limit in examining some issues: • What is the contend of the concept non - conforming goods? • In case o f non - coníbrming goods, which remedies should be available to the buyer? • The position or the relationship between damages and other remedies? '• What losses are compensated? • How is the damage calculated? • How is the buyer’s right to obtain damages limited in CISG and Vietnamese law? • W hether and if so how the buyer should be obliged to notify the seller, and within which time limits he should be obliged to bring forward his claim? Other controversial issues are to examine base on the result o f precise analysis: • What are the problem concerning the provisions about damages vvithin CISG and Vietnam ese law? • How to resolve these problems to improve Vietnamese law? Pirstly, descriptive method will be used to bring a com prehensive view about the regulations on dam ages for non - confonning goods in CISG and Vietnam ese law The thesis, then, bases on a analysis some im portant cases and leading academic writing to clarify regulations The com parative m ethod will be used thtough to compare CISG w ith Vietnam ese law The thesis is divided into three chapters Chapter one exam ines general issues, basic notions which connect to determ ination o f dam ages for non - conforming goods; Chapter two gives the answers o f research questions within CISG and Vietnamese law; Chapter three gives some evaluations from com parative studying and suggest some solutions to improve V ietnam ese law Introduction 1.1 Subject-Back ground The last two decades have seen a huge change in international commerce with the emergence o f the global economy Sale o f goods is the m ost popular form of intemational commerce Sales o f goods have been growing rapidly with the opening up o f new markets in developing countries and, as a result, disputes betvveen transnational contracting parties have increased in number, size and complexity In a sales contract, vvhatever one party expects, is connected closely to the períormance obligations o f the other party So if one party, does not períbrm its obligations, for whatever reason, in almost every case, the other party will be damaged Defective períormance as a seller’s breach o f contract is very common and is where most problems arise According to Hondius “The sale o f goods, it has been said, is the single most important contract, and delivery o f defective goods is the single most important complication”1 To protect the interest o f the buyer in the case of non-conforming goods, most legal systems give them the right to a remedy and the right to claim damages is a very important one Damages constitutes one o f the most complex remedies after a breach o f contract has taken place, as it may always be claimed to compensate the aggrieved party in addition to any other available remedies such as speciíìc performance, suspension o f performance, and avoidance In fact the application o f damages as a remedy in intemational transactions is rather controversial not only from its nature but also because the rules conceming it are not the same in different countries Nowadays international commercial practice require the harmonization o f the rules which allow traders the world over to conduct business on the same terms Or in other words, the key factor in the need to develop uniíbrm international commercial law is globalization Vienna convention on contract' for 1980(CISG) was draữed by UNCITRAL in an attempt to create a uniíịrm and applicable law for intemational sale o f goods contracts Now, CISG with over 70 State members is the uniíorm sales ]aw in countries that account for morẹ than two thirds o f all world trade.2 CISG applies to Cited in Sivesand (2005), p.7 This is the claim on the w elcom e page o f Pace Law School CISG database website, accessed on April 24, 2008 at http://cisg.law.pace.edu/ Damages for non-conform ing Goods contracts of sale o f goods between parties whose places o f business are in different States and either both o f those States are Contracting States or the rules o f private intemational law lead to the law o f a contracting State3 but it is not mandatory,4 in many cases CISG is applied by regulating within Standard terms which is One of components made up intemational commercial law CISG becomes the treaty is applied most widely amongs multilateral treaties in intemational commerce about intemational sale of goods.5 Many big trading partners o f Vietnam ratiĩied CISG but Vietnam has not yet ratiíĩed it Note that the regulation o f damages has an important position in CISG Vietnamese law also provides for damages for breach o f contract but only in general and does not cover intemational sale o f goods contracts speciíìcally To write about damages for non-conforming goods under both CISG and Vietnamese law ữom a comparative perspective seems a very interesting legal project 1.2 Research question and aim of thesis The main purpose o f this essay is to compare the rules in the CISG to the rules in Vietnamese law concerning damages as a buyer’s remedy when the goods not coníịrm to the contract Beside this, the thesis will try to give some suggestions for improving Vietnamese law in the area To fulfíl the purpose o f the thesis the following questions will be dealt with: • W hat is the content o f the concept non-conforming goods under the CISG and Vietnamese law? In case o f non-conforming goods, which remedies should be available to the buyer under CISG and Vietnamese law? • The position or the relationship betvveen damages and other remedies? • How is the damage calculated? • How is the buyer’s right to obtain damages limited in CISG and Vietnamese law? See Article 1(1)C ISG See Article 6, Article 95 CISG N guyễn M inh Hằng (2006) Damages for non-conform ing Goods 3.6 Exemptions for damages It is universally recognized that one of the important principles in contract law is “pacta sunt s e r v a n d a It means that contractual undertakings must be réspected Each party is responsible for the execution o f an agreement and hence also for its non -execution The purpose o f a contract is also to “íịrecast, define and clarify the intended and anticipated períbrmance” As such, each party would have allocated manageable risks to the contract and should be aware o f the existence o f possible unjbreseen circumstances The problem is how to manage these unforeseen circumstances In an economic s e n s e it is irrelevant whether the c a u s e o f the non execution is outside the control o f the breaching party or vvhether such impediments to an execution o f a contract were íịreseeable This principle arguably rlects natural justice, as it protects the interests o f the other party by biding a person to his promise The reason is that the aggrieved party will suffer damages or losses which need to be accounted for However, it is recognized that not all breaches o f a contract can be treated in the same way, as in certain circumstances a party may be coníronted by events which are beyond his control Such events can make períịrmance either impossible or it can become too heavy a burden In that sense, the principle o f pacta sun servanda vvill lead to the opposite o f its aim, namely to protect the parties to a contract Such events not íịster the principle o f natural ịustice either Most countries thereíore have r 'C0gnized this fact and hence rules dealing with such situations are embodies in law The principle which embodies the rule o f changed circumstances is the doctrine of rebus sic stantibus The approach to changed circumstances varies from country to country and there is simply no uniíbrmity in approach Some legal systems only accept a narrow range o f excuses; others are more generous The rules dealing with situations o f changed or supervening contractual circumstances are oriented on the two basic concepts of hardship and force majeure Force majeure has its origins in the Code Napoleon and was adopted in different forms in municipal law General speaking, force majeure occurs when “the períbrmance o f a contract is impossible due to unforeseen events beyond the control o f the parties”89 The aim o f force majeure is to settle the problems resulting from non - períịrmance either by suspension or termination o f contractual obligations Hardship, on the other hand, is írequently incorporated into contracts as an express clause It normally incorporates matters which are thought to be detrimental in the execution o f a contract but not impossible These circumstances must be o f a 89 Zeller (2005), p.169 46 Damages for non-conform ing Goods íundamental nature and beyond the control o f either party Most importantly, these circumstances must be un-comtemplated and uníbreseenable The concepts o f hardship and íbrce mạịeure seem to be related to each other, particularly since they share some features: they both intend to regulate the effect of changed circumstances The difference between the two concepts is most aptly described in such a way: hardship is at stake where the perfomiance o f the disadvantaged party has become much more burdensome, but not impossible, while force mạịeure means that the períbrmance the party concemed has become impossible, at least temporarily Moreover, there seems to be a functional difference between the two concepts Hardship constitutes a reason for a change in the contractual program o f the parties The aim o f the parties remains to implement the contract Force majeure, however, is situated in the context o f non-performance, and deals with the suspension or termination o f the contract The CISG deals with the issue o f changed circumstances on an intemational level by avoiding any reference to existing domestic concepts The draíters o f the CISG chose the word “impediment” instead o f “circumstance” or hardship or íbrce majeure for that matter Article 79 o f CISG provides: (1) A party is not liable for a failure to perform any o f his obligations if he proves that the failure w as due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time o f the conclusion o f the contract or to have avoided or overcom e it or its consequences ( ) Article 79 exempts a party from liability for damages when that party has failed to perform any o f its obligations, including the seller's obligation to deliver coníorming goods.90 “Failure to perform” vvithin the meaning o f article 79, has the same meaning as breach o f contract in the provisions conceming damages Article 79 describes conditions that must be satisfied beíbre an exemption can be claimed First, the failure to perform due to an impediment or the impediment should have caused the failure to períịrm Second, the impediment m ust be beyond his control Third, it was not reasonable to expect that the party took the impediment into account at the time of the conclusion o f the contract or in other word, the impediment is uníoreseeable Forth, as a important requirement, the impediment could not have been avoided or overcome in substance or consequence The breaching party must satisíy both of fours conditions above if it is exempted It can be interpreted is that the períịrmance of the contract has been prevented by something outside the breaching party’s sphere of control qn CISG A đvisory Council Opinion N o 47 Damages for n on-conform ing Goods The breaching party is only protected from claim ing dam ages but not the right o f the aggrieved party to other remedy such as avoid the contract, require to reduce price The exemption provided by article 79 has effect for the period during vvhich the impediment exists The delivery o f non - conforming goods is also a failure to períbrm v/ithin the meaning o f Article 79 Admittedly, it is diffícult to defme and identify an impediment which has caused the failure to perform if the non - perform ance id based on the non -coníorm ity o f the goods delivered The term “im pedim ent” as used in article 79 mainly fíts an event which restricts the scope o f the breaching party’s activities in particular his ability to acquire the contract goods Vietnamese Law: The solutions relate to im m unity from liability for breach o f contract can be found in Article 302 (2), (3) V ietnam ese Civil Code vvithin general principle applying for breach o f civil duties Vietnam ese Civil Code only provides two bases of the immunity are,'force m ajeure and the fault o f the irýured party; The opportunities to agree o f the parties is opened H ow ever, A rticles 294, 295, 296 of Vietnamese commercial Law provide the parties in contract have the right to agree about any event which the occuưence o f it will free breaching party from liability Besides it, the breaching party will be im m une from liability when: (i) Upon the occuưence o f an event o f force majeure; (ii) U pon a breach by one party which was totally due to the fault o f the other party; (iii) Upon a breach by one party which was due to implementation o f a decision o f a com petent State adm inistrative agency about which the parties could not have known at the time o f entering into the contract.91Article 161(1) o f Vietnamese Civil Code 2005 provides force majeure “means an event which occurs objectively and unpredictably and can not be overcome though all necessary measures have been applied and all the permitted capabilities have been used” So, an event is considered as a force mạịeure in this sense when it satisíìes: Occurring after the parties have concluded the contract; It is unusual so the parties can not predict and overcome; It causes the breach o f contract In the case o f force mạịeure, the parties may agree to extend the time -lim it for períbrmance o f contractual obligations, if the parties does not agree or does not reach agreement, the time limit for períbrm ance o f the obligations will be extended equal to the time which force majeure have happened plus the reasonable tim e to remedy the effect o f it but not exeed the tim e is prọvided in A rticle 296 Com m ercial Law In case the time for performance extended over the tim e is provided in article 296, the parties have the right to refuse to períịrm and no parties have the right to damages 91 Article 294 o f Vietnam ese Com mercial Law 2005 48 Damages fo r non-conform ing Goods When the circumtances which is immuned according to Article 294 occurs, the breaching party has the duty to notice immidiately to the aggrieved party and must prove the circumtances are immuned Article 294 Vietnamese Commercial law provides “A party in breach o f contract shall be immune from liability in the following cases: ” The Law does not indicate clearly what remedy the breaching party is immuned So It can be said that one important difference between the provisions o f the Convention and the provisions of Vietnamese law on exemptions is, according to Vietnamese law, the breaching party will be exempted from not only the liability to pay damages but also other remedy, under the provisions of the Convention, breaching party will be exempted only from liability to pay damages It clear that the way Vietnamese Law provide in this issue is not reasonable It clearly unfair and strongly violate the right and beneíĩts o f the aggrieved party Infact, the aggrieved party entirely can avoid, temporary cessation o f contractual períbrmance or Suspension o f contractual períormance Addition, Commercial Law does not provide the period during which the exemption provided by article 294 has effect This make contractual parties feel vague about the “fate of contract” 4.1 Some evaiuative conclusions drawn from this comparative study and some suggestions on improving Vietnamese Law Some evaluative conclusions drawn from this comparative studying The starting point o f this thesis was studying an effective and popular solution applying in intemational transaction, the remedy o f damages Because o f the complexity of the damages, the studying is limited on observation the applying the remedy o f damages in case non -coníịrm ing goods vvhich is the breach by the seller The problem is that solutions are stipulated vary between legal systems The draíters o f CISG has attempted to harmonize substantive contract law CISG has been One of the more successíul intemational intrusments produced Few other commercial law conventions have attracted as many states like CISG CISG has had considerable impact intemationally on the rịrm o f sales and contract laws CISG has became a model for improving domestic law The Scandinavian States have drawn on the 49 Damages for non-conform ing Goods Convention in revising their sales law.92 Comparative studying Vietnamese law with CISG, of course bring many advantages Hovvever this unification or harmonization attempt h a s not been without its critics 93 The concept o f “N on-conform ing goods” under Vietnamese Law is narrower than the CISG, it only relates to the requirement o f the quality o f the goods while under CISG, this concept relates to both quality and quantity o f the goods A limitation relates to the measure o f damages and dìne which loss is recoverable which both CISG and Vietnamese Law have is the lack o f defínition of loss and the extend o f loss under two systems Beside it, the way Vietnamese Commercial Law provides about loss can make confusion, specially make the understanding direct and indirect loss becomes vague Normally in intemational commercial law, indirect loss means loss o f proĩit but in Article 302(2) Vietnamese Commercial Law “The value o f damages for loss shall comprise the value o f the actual and direct loss vvhich the aggrieved party has had to bear due to the defaulting party plus the [loss oj7 direct profìts ” and according to Article 303 “liability to pay damages for loss shall arise when the act in breach o f the contract is the direct cause o f the loss''’’ Generally, it can be saiđ that many o f the principles used in the calculation of damages are similar under CISG and Vietnamese Law Both CISG and Vietnamese Law provide the rules o f full compensation, causation, mitigation However, Vietnamese Law is lack o f the rule o f foreseeability vvhich is the powerful rule of CISG while CISG is lack o f the rule o f proof which is mentioned quite detail under Vietnamese Law Both Vietnamese law and CISG does not accept fault principle Under CISG, the rules relating the recovery o f the remedy o f damages can be found in Article 74 to 78 By virtue o f these rules, the buyer can recover damages to compensate for all foreseeable losses (rule o f foreseeability) caused by the breach of delivering non - coníbrming goods o f seller (rule o f causation), provided that he has properly m itigated his damage (rule o f mitigation) In principle, the Vienna Converltion provides a uniform concept o f remedy for the different kinds o f breaches o f contract rather than providittg different remedies for different kinds o f breaches, rathẻ than different remedy for different kinds o f breaches Differentiation in accordance w ith the type o f breach only follows indirectly from the specifíc provisions The remedy o f damages is designed to applied for any breach o f contract by both seller and buyer, include the breach o f deliver non -coníbrm ing goods The 92 Honnold (1 9 ), p.15 93 Zeller (2 0 ), p.212 50 Damages for non-conform ing Goods CISG does not contain the limitation fouhd in some jurisdictions (for example, the United States) that damages must be proved with reasonable certainty (rule o f prooí) A major limitation which both CISG and Vietnamese Law have, relates to damage recovery is the lack o f a separate provision for breach o f confonnity o f goods Instead, Article 74 CISG applies to all breaches o f sale contract and is íurther limited by Article which disallows "claims for damages in the case o f death or bodily inịury caused by the goods, irrespective o f whether or not the buyer him self or a third person is involved." The remedy o f damages under Vietnam ese Commercial Law applies to all breach of all contract provided in Commercial Law It is clear that CISG imposes the higher requirement to the good faith and the level of whole heartedness o f the contractual parties when enter into agreement Such as, at the time to conclude the contract, the parties are required to consider and evaluate carefully not only the interest they will be received but the losses can occur if the contract will not be performed properly (Article 74 requires parties, at the time to conclude the contract must predict (íịresee) possible consequence o f the breach of contract, only the loss which the party in breach foresaw or ought to have íbreseen at the time of the conclusion o f the contract must be compensated); when the contract was concluded , the parties must follow the process o f perform ing the contract, make the advantages conditions to each other perform the obligations (Article 38 provides the buyer must examine the goods; Article 39 provides the buyer loses the right to rẽly 011 a lack o f eoníbrmity o f the goods if he does not períbrm the notification; ) the contractual parties also are required to catch the changing or happening o f the circumstances which has affect to the períorming o f the contract and notice to each other (Article 74 states clearly the party who fails to perform due to an impediment beyond his control must give notice to the other party o f the impediment and its effect on his ability to períịrm; ) The all provisions o f CISG show the purpose o f the CISG is to keep the contract ịot as long as possible.94 4.2 Solutions to improve Vietnamese Law on damages for non-conforming goods in International sale of goods contract 4.2.1 Vietnam should ratiíy the Vienna Convention as soon as possible Through the study o f this subject, we can see that the issues on damages due to breach o f contract on International sale o f goods Contract is much more còmplex 94 Zeller (2005), p 40 51 Damages fo r non-conform ing Goods than on Domestic sale of goods tract From the com parative studying and íìnd some limits on regulations o f Vietnam ese Law on dam ages for non-conform ing goods as above, we suggest Viet N am should ratiíy the V ienna Convention 1980 because: + The Vienna Convention is a treaty which is applied m o s t widely in intemational sales of goods It provides very clear provisions about m ost o f the issues relating to the períịrm ance o f the intem ational sale o f goods contract A lthough Vietnamese Commercial 2005 has certain im provem ent in the access closer to the intemational practices and com m ercial law, but the regulations on the intem ational sale o f goods contract is provided generally, especially the liabilities o f the parties in the contract is not provided particularly but applied generally like dom estic contract and need not to consider vvhether it is a sale o f goods contact or not, it clearly is not reasonable + Xhe detailed provisions o f the Convention strike a fair balance betv/een the buyer and the seller com ing from different states + Joining the C onvention will help V ietnam ese enterprises by saving their time in negotiate, studying and approach the legal system s o f new countries Further, although V ietnam does have a commercial law with good general principles, those for international sales o f Goods lack some suitable provisions + In the current conditions o f intem ational econom ic integration, joining'C ISG is almost necessary and will assist the trading activities o f V ietnam in general and the sale o f goods (im port and export) in particular It will show the effort o f Vietnam is making to integrate into intem ational trade It also reílects the views o f the Vietnamese State to m eet increasingly high requirem ents of intem ational businessmen both in and outside the country, create conditions for Vietnam ese and overseas enterprises has com m on "voice", com m on opinion and ultimately, intemational com m ercial cooperative relationships will becom e increasingly more secure, long-lasting and open up Integration in intem ational econom y positively is a m ajor policy o f Vietnam The narovving the non-com patibility betw een com m ercial law o f Vietnam and intem ational com m ercial law is a priority The im plim entation o f this is also a commitment o f Vietnam when joining WTO 4.2.2 Amending somes regulations of Vietnamese Law on this issue As indicated above the relation betvveen V ietnam ese Com m ercial Law and Vietnamese Civil Code is the relationaship betvveen the general and the particular, so beíbre giving suggestions to improve Vietnam ese regulations govem intemational 52 Damages for non-conform ing Goods sale contract directly in Commercial Law, the author will have some suggestions to improve Civil Code a) Amending Vietnamese Civil Code Provisions o f Vietnamese Law on the fault o f the party in breach o f contract is not uniíied and has many ureasonable points As indicated above, the Civil Code regulates “A person who does not períorm or períbrm s improperly a civil obligation must bear civil liability if he/she is at fault” while Commercial Law does nor consider fault as one o f bases which the liability to pay damages for loss shall arise The Civil Code provisions on civil liability apply to both civil liabilities in the contract and outside o f the contract is not reasonable Because fault in contractual liability is not entirely the same in civil liability outside the contract Thereíore the author suggests, it should modify the Civil Code by separating provisions on contracual liability and civil liability outside the contract Speciĩically, it need to build up the independent regulations on civil liabilities in the contract in the Section 7, Chapter XVII, third part "Civil Contracts." The issue on exemptions of civil liabiịlity when a breach o f contract, the law is not uniform As analyzed above, the Civil Code 2005 has only two cases which base on them the breaching party will be exempted are íbrce m ajeur and the fault o f the aggrieved party Vietnamese Commercial Law 2005 stipulates the four bases, compared to the Civil Code it has further the base o f the agreement o f contractual parties on this issue, and the breach is due to the implementation o f decisions o f the administrative State authority that the parties can not know at the time o f signing the contract To limit this conílict, the author propose to rebuild the regulations on exemptions in the Civil Code, It should separate the regulations on exemptions of contractual liability with other issues on the contracíual liabilities as mentioned above b) Amanding Vietnamese Commercial Law Vietnamese Commercial Law 2005 has only Articles (from Article 27 to Article 33) for regulating the intemational sale o f goods contract and only stop at the level o f clariíying the concept o f intemational sale o f goods contract Other issues such as rights and obligations o f the parties, the issue o f risk transfer, the time o f transfer of ownership, liabilities due to breach o f intemational sale o f goods contract are applied as to the domestic contract, it is clearly unreasonable Firstly, the author suggests it should build a independent system o f regulations to adjust the overall problems of the intem ational sale o f goods contract Especially for the regulations relating to the non-conform ing goods and the issue o f damages, the author have some suggestions as follows: 53 Damages for non-conform ing Goods M odifying the concept o f conforming goods including the requirement on quatity o f goods, this will be suitable for regulation on the obligations o f the seller as "deliver goods and vouchers [relating to the goods] in accordance with the contractual agreements on quantity, quality, method o f packaging and preservation and in accordance with other clauses in the contract" Thereíore, the addition o f the quantity o f goods as a factor in the concept o f conforming goods not only make advantages for the application, but also make the provisions o f Vietnamese law compatible with the International law Regarding loss recoverable, the authors proposes in Article 302(2) should redìne as the "The value o f damages for loss shall comprise the value o f the actual and direct loss which the aggrieved party has had to bear due to the defaulting party plus the [loss of] prìts which the aggrieved party would have eamed in the absence o f such breach", i.e remove the vvord" directly " before the word" profìts Loss of profits is the indirect loss The word "direct" before “proíĩts” will cause the confusing in applying, moreover such regulation will not ensure the benefíts o f the parties in commercial relationship and in accordance with the principle o f full compensation as analyzed above in 3.2.2 Regarding to regulations on exemptions, base on the analyzing in 3.6, author propose it should provides clealy that exemptions are applies only to protect the breaching parties excluded in exercising moneytary remedies such as damages and penalty for breach Authors also proposes in Article 294 should clarify the period during which the exemption provided by this article has effect 54 Damages fo r non-conform ing Goods Conclusion Contracts for intemational sale o f goods is the m ost com m on types o f contract that subjects o f intemational business use in intem ational transaction In the current conditions o f intemational economic integration, the actions o f purchasing goods between the subjects o f intem ational business take palce verbant than ever, that promote the developm ent o f the different econom ies, cu t-o ff the different in politics, close the gap between the countries Hovvever, the grow ing rapidly o f intemational sale o f goods has lead to the disputes betw een transnational contracting parties have increased in number, size and complexity The intem ational character causes resolving disputes arising from the contract increased in level o f complexity, and requires the resolution to be fast and ílexible, efficient Thus, studying the remedies for breach o f contract o f parties in intem ational sale o f goods contract is necessary Vietnam ese Law on international sale o f goods contract has not been provided systematically, sufficiently and com prehensively, it is not appropriate to the nature o f the com plexity o f this activitiy Although V ietnam ese Com m ercial Law 2005 has certain im provement in the access closer to the intem ational practices and commercial law but not m eet the practical developm ent o f intem ationalcom m ercial activities From the research provisions o f the Vienna C onvention 1980, com pared with provisions o f Vietnam ese law, the author tried to discover and set out some recom m endations to improve V ietnam ese law on the rem edy o f dam ages ,for nonconform ing goods A uthor also hope, the thesis will contribute scientiíĩc knówledge in improving Vietnam ese law on intem ational sale o f goods contract in general 55 Table of Statutes and other Legal Instruments International Treaties and Conventions The UN Convention on the International Sale o f Goods (C ISG) adopted by a diplomatic conference on lA pril 1980 became into force on January 1988, available at http://w w w uncitral.org/pdf/english/texts/sales/cisg/C ISG pdf National Legislations Vỉetnam Constitution (1992) o f the Socialist Republic o f Vietnam Civil Code 2005(No 33/2005/Q H 11 o f 14 June 2005) Commercial Law 2005 (No 36/2005/QH 11 o f 14 June 2005 Civil Code 1995 Commercial Law 1997 United States Uniíorm Commercial Code, available at http://w w w law cornell.edu/ucc/ĩ/articlel htm #sl-201 France Naponeon Code hltp://www.napoleon series.org/research/government/code/book3/c title03.htm l#chapterl 56 Case Law Rheinland Versicherung V Atlarex and Allianz Subalpina, Case No 405; Italy, 12 July 2000 District Court Vigevano, Cite as http://cisgw 3.law D ace.edu/cases/000712i3.htm l Delchi Carrier, S.p.A V Rotorex Corp, Case No 88-CV-1078, United States September 1994 Federal District Court, Cite as http://cisgw3.law.pace.edu/cases/940909ul html ICC Arbitration Case No 7565 o f 1994, available at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/947565il html Gruppo IMAR S.p.A V Protech Horst, Case No 920159, Netherlands May 1993 District Court Roermond Avallable at http://cissw3.law.pace.edu/cisg/wais/db/cases2/930506nl.htm l W M.J.M Bronneberg V Ceramica Belvédère S.p.A, Case No 16.442, Netherlands 20 February 1998 Supreme Court, available at http://cisạw3 law.pace.edu/cisg/wais/db/cases2/980220n 1.html Germany 29 January 1996 Lower Court Augsburg (Shoe case) translation available at http://cisgw3 law.pace.edu/cases/960129g 1.html CME Cooperative Maritime Etaploise S.A.C.V V Bos Fishproducts lirk BV, 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Svvedish -Vietnamese Master’s Programme MASTER’S THESIS TRAN THUY LINH Damages for Non- conforming Goods under Vienna Convention A Comparison with Vietnamese Law SU PE R V ISO R S: Eva Lindell - Frantz... provides that a claim for interest shall be “without prejudice to any claim for damages recoverable under Article 74” • And some other articles can also affect claims for damages, such as Article... only in general and does not cover intemational sale o f goods contracts speciíìcally To write about damages for non- conforming goods under both CISG and Vietnamese law ữom a comparative perspective